In a decision released October 27, the Federal Energy Regulatory Commission (FERC) denied a request from Tri-State Generation and Transmission Association, a Colorado-based cooperative that delivers power across four Western states, to create a new “large-load” tariff.
The plan would have allowed Tri-State to negotiate individual contracts with any customer demanding more than 25 megawatts of power—roughly the amount needed to run a small city—requiring those users to help cover the cost of new substations, transmission lines, and other grid upgrades.
FERC’s decision reaffirmed the boundary between federal and state authority, signaling that rate design for large-load customers falls to state regulators.
According to the ruling, Tri-State’s proposal “effectively regulates retail service”—the kind of customer billing normally decided by state utility commissions. That placed the plan outside federal jurisdiction.
The case underscores a growing tug-of-war over jurisdiction—and how quickly long-standing rules are being tested by new kinds of energy demand. FERC oversees wholesale power transactions between utilities and suppliers. State regulators, meanwhile, set retail rates for homes and businesses.
As utilities field record requests from mega-projects that blur those boundaries—especially those connecting through local co-ops instead of large investor-owned utilities—the question of who decides what has become increasingly complicated.
Earlier this month, Energy Secretary Chris Wright directed FERC to begin drafting national rules for connecting large energy loads to the grid—a step aimed at clarifying how utilities share costs and plan for projects like data centers and industrial hubs.For Tri-State, that guidance can’t come soon enough. The co-op must now work with state regulators in Colorado, Nebraska, New Mexico, and Wyoming to design rate structures that comply with local laws.
Other utilities are watching closely. Duke Energy, AEP, and Georgia Power have each advanced their own versions of large-load or “clean transition” tariffs through state commissions, seeking to balance economic growth with grid stability.
Until federal standards are in place, utilities will continue operating within a patchwork of state-by-state rules—exactly the kind of fragmentation that makes long-term planning difficult at a time when electricity demand is climbing faster than it has in decades.
